The lawsuit alleges Travelers Companies Inc. was trying to hide the dangerous effects of asbestos, the exposure of which is a leading cause of the deadly form of cancer, mesothelioma, which targets the lining of the lungs, heart, abdomen and other internal organs. Asbestos can also cause the asbestosis, a chronic lungs disease.
The insurance giant argued that asbestos claims against the insurer must be paid out of a trust created in 1986 by Johns Manville Corporation, a leading producer of asbestos.
While settling the 2004 suit Travelers also included a clause stating that federal courts make clear the company would not have to face similar asbestos-related lawsuits in the future.
However, on Thursday, the U.S. Supreme Court overruled and ordered the Travelers settlements returned to the appeals court for reconsideration in keeping with the high court’s opinion.
According to Supreme Court the company can now settle lawsuits filed over injuries caused by exposure to asbestos for $500 million, and also stipulate that the settlements protect the insurance company from future asbestos litigation.